Today, we announced an historic agreement for a $30 million equity investment in U.S.-based sustainable biofuel developer Fulcrum BioEnergy, a pioneer in the development and commercialization of converting municipal solid waste into low-cost sustainable aviation biofuel. It is also the single largest investment by a U.S. airline in alternative fuels and sets us apart in the aviation industry in the advancement of aviation biofuels and carbon emissions reductions. In addition to the equity investment, we and Fulcrum have entered into an agreement that contemplates the joint development of up to five projects located near our hubs expected to produce up to 180 million gallons of fuel per year.

“We know developing alternative fuels is an emerging industry that is vital to the future of aviation and this is just one of our initiatives to help make these fuels saleable and scalable," said Brett Hart, our executive vice president and general counsel. “Investing in alternative fuels is not only good for the environment, it's a smart move for our company as biofuels have potential to hedge against future oil price volatility and carbon regulations."

We have also negotiated a long-term supply agreement with Fulcrum and, subject to availability, will have the opportunity to purchase at least 90 million gallons of sustainable aviation fuel a year for a minimum of 10 years at a cost that is competitive with conventional jet fuel. This alternative fuel will be a drop-in fuel that meets all of the airline's technical requirements and specifications, and will power the aircraft in the same way as conventional jet fuel. Fulcrum expects its first alternative fuels plant to begin commercial operation in 2017.

Fulcrum's Waste-to-Biofuel Technology

Fulcrum's technology converts household trash, known as municipal solid waste (MSW), into renewable jet fuel. Fulcrum's renewable jet fuel is expected to provide a greater than 80 percent reduction in lifecycle carbon emissions when compared to conventional jet fuel. Fulcrum has successfully developed and proven its technology to convert MSW into low-cost, low-carbon transportation fuels in an innovative, clean and efficient thermochemical process. MSW is an attractive biofuel feedstock as it is low cost, has limited volatility and a virtually unlimited supply. United's agreement with Fulcrum is expected to decrease the airline's carbon footprint through the use of sustainable aviation biofuel, while also diverting waste from landfills and creating new jobs in those communities where new Fulcrum facilities are sited. Fulcrum's projects have also received support and participation from the U.S. Air Force and U.S. Navy for the future production of fuel that meets military specifications.

“This partnership underscores United's efforts to be a leader in alternative fuels as well as our efforts to lead commercial aviation as an environmentally responsible company," said United's Managing Director for Environmental Affairs and Sustainability Angela Foster-Rice. “From our carbon offset program, to our fuel saving winglet technology, this investment in Fulcrum represents yet another example of our Eco-Skies commitment to a more sustainable future."

“United Airlines just demonstrated why they are one of the leaders in commercial aviation," said E. James Macias, Fulcrum's President and Chief Executive Officer. “United's investment and participation in our projects is a tremendous boost to our program. Their support, commitment and backing accelerates our schedule to bring large volumes of competitively-priced, sustainable fuels to United and the rest of the aviation industry."